- Shares of Hyundai and Kia surged as a potential deal with Apple to build electric vehicles emerges
- The $3.59 billion deal is expected to be finalized on Feb. 17
- The first Apple Car will most likely be self-driving, or autonomous
Shares of South Korean automakers Kia and parent company Hyundai surged Thursday after news of a potential deal with Apple to manufacture autonomous electric cars.
Hyundai and Kia saw their shares rise by 1.22% and 0.31%, respectively, in the Thursday morning trade after it was revealed both were close to finalizing the $3.59 billion deal with Apple to produce electric vehicles at the Kia assembly plant in Georgia.
A South Korean news outlet said Apple and the two car manufacturers are expected to sign the deal on Feb. 17.
The agreement comes after years of speculation about whether the game-changing tech company known for its iPhones, iWatches and other innovative products would get into the auto business and come out with its own electric vehicle.
“The first Apple Cars will not be designed to have a driver. These will be autonomous, electric vehicles designed to operate without a driver and focused on the last mile,” a source familiar with the current plan told CNBC.
The “Apple Car,” as it’s referred to, is currently being developed by Apple and may head into production as early as 2024. Yet people familiar with the deal told CNBC they believe the rollout of the electric cars could be pushed back.
Other sources with knowledge of the potential teaming told CNBC that Apple has yet to reach an agreement with Hyundai-Kia. They suggested that the tech company may decide to strike a deal with a different automaker, either separately or in addition to Hyundai and Kia. If the partnership pushes through, Apple and Hyundai-Kia aim to manufacture about 100,000 vehicles per year.
“I doubt Hyundai is the only automaker they could strike a deal with, there could be somebody else,” one source pointed out.
Apple’s decision to potentially partner with Hyundai-Kia to build its own line of electric vehicles may be influenced by the South Korean companies being established automakers in North America.
Apple is expected to manufacture the software and hardware for the electric automobiles.
For Hyundai and Kia, a partnership with Apple could boost their plans to develop their own autonomous vehicles. Hyundai has partnered with Aptiv — an American-Irish auto parts company — to produce technology for autonomous cars, such as robotaxis.